The system works on the same principle as a sonar - it releases (in this case) Wi-Fi radio waves and detects and measures their intensity as they rebound off walls and objects.
"The technology can also determine the motion of different persons in a closed room," it says on the project's page. "It can answer questions such as: Is the person moving towards the device or away from it? What is the angle of motion of a person inside a closed room relative to the location of WiVi?" I can detect simple gestures, and determine up to 3 moving objects.
So far, the system's resolution is law, but they hope to improve it with time.
Wi-Vi could be used by law enforcement agents to avoid walking into an ambush and help control hostage situations, and by emergency responders to find casualties buried beneath rubble and collapsed structures. But it can also be useful for private citizens in situations such as suspected home invasions.
In a more distant future, its use in considerably more low-risk situations is also possible: non-invasive monitoring of children and elderly, controlling household appliances via gestures, gaming, and more.
Here's an interesting video that shows how the system works now: